NEW YORK (Reuters) - Publishers may have to pay freelance writers, photographers and artists an extra fee for work reproduced in electronic databases or face the daunting task of deleting the material, under a new U.S. federal appeals court ruling.

The U.S. Second Circuit Court of Appeals held that publishers must get freelancers' permission before placing their work in databases. The decision is a blow to a variety of publishers who believed that the reproductions were actually ''revisions'' that were not protected by federal copyright laws.

The timing of the ruling, which was dated Friday, is particularly tough on publishers since it comes as an increasing amount of information is being placed on the Internet.

Under the decision, publishers could be forced to pay freelance authors retroactively for reproduced work or be forced to remove the material from their databases.

Although the ruling by the appeals court is only binding in the federal circuit made up of New York, Connecticut and Vermont, it has a broad impact because many book, magazine and other types of publishers are based or have operations in New York. For example, defendants in the suit include the New York Times Co Times Mirror Co's Newsday, and Time Warner's Time Inc.

Other defendants are Mead Data Central Corp., which had owned the Lexis-Nexis data bases, and University Microfilms Inc. Defense lawyers have not yet decided whether to appeal.

RULING EXPECTED TO INFLUENCE OTHER COURTS

The ruling is also important because the Second Circuit is highly respected in the area of intellectual property and its findings are expected to influence other federal courts.

``I don't think the U.S. Supreme Court will take an appeal. I think the New York law will be the law,'' said Martin Garbus, a prominent First Amendment lawyer and author.

``It's a wonderful ruling. I think it's just and fair,'' he said.

``I think the decision is correct,'' said Thomas Smart, an intellectual property specialist at one of Manhattan's top law firms, Kaye, Scholer, Fierman, Hays & Handler.

The appeals ruling stems from a 1993 lawsuit brought by the National Writers Union and a group of freelancers who alleged that the publishers had infringed on their copyrights by reproducing work online without permission.

The defendants argued that such work constituted revised versions of originals and did not have copyright protection. A trial judge ruled for the publishers in 1997.

However, the Second Circuit disagreed.

``There is no feature peculiar to the databases at issue in this appeal that would cause us to view them as 'revisions,''' wrote Chief Judge Ralph Winter in the appeals court's opinion.

ECONOMIC IMPACT OF RULING REMAINS UNCLEAR

The extent of the economic impact on publishers is far from clear. Some publishers have contracts with freelancers specifying that no extra fees will be paid for reproduction of works in databases, while other publishers have no such protection.

For example, George Freeman, in-house counsel for the New York Times, said he did not think the ruling would have much financial effect on the paper because it has been requiring freelancers to sign such contracts over the last four or five years.

However, Jonathan Tasini, president of the National Writers Union, said his group, which represents some 5,400 freelance writers, as well as numerous other types of freelancers, is poised to hit publishers with thousands of claims.

``We're in the driver's seat now, but we are open to listening,'' he said.

In fact, Tasini sent a letter to major publishers Monday proposing a licensing system that would end the litigation.

``Ultimately, they (publishers) will negotiate with the writers and it won't mean that much economically to the publishers because writers don't have that much leverage,'' Garbus said. ``It will mean some extra money for writers but not that much.''

Smart agreed: ``If you're a writer and you want the contract, they've got the power.''

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